How the Autumn Budget 2024 affects your finances

Last Updated: 14 May 2025

Introduction to the Autumn Budget 2024

The recent Autumn Budget 2024 has introduced several key changes that will impact financial planning for clients. Understanding these implications is crucial to navigating the evolving financial planning landscape effectively. This article summarises the main changes and highlights their potential effects on your finances.

Capital Gains Tax

The main rates of Capital Gains Tax (CGT) will rise from 10% to 18% for basic rate taxpayers and from 20% to 24% for higher rate taxpayers. These rises come into effect on the 30th of October 2024.

As a reminder, basic rate taxpayers may pay some higher rate Capital Gains Tax on large gains. It’s worth taking some advice if you are unsure how to calculate this.

Business Asset Disposal Relief (formerly Entrepreneur’s Relief) and Investors’ Relief (IR) rates will increase from 10% to 14% from 6 April 2025 and further to 18% from 6 April 2026.

There were no changes to the Capital Gains Tax allowance, so it remains at £3,000 and £1,500 for trusts.

Inheritance Tax

The current Inheritance Tax thresholds will be maintained until 5 April 2030, which includes a nil-rate band of £325,000 and a residence nil-rate band of £175,000 for estates up to £2 million. Estates can therefore pass on up to £500,000 without an inheritance tax liability; this increases to up to £1 million for a married couple.

Unused pension funds and death benefits payable from a pension will be included in the value of estates for inheritance tax purposes from 6 April 2027.

From 6 April 2026, Agricultural and Business Property Relief will be reformed, maintaining 100% relief for the first £1 million of combined assets and 50% relief thereafter; an effective rate of 20%. The rate for “not listed” shares (such as shares listed on the AIM index) will also be set at 50% in all circumstances. The changes to the tax of AIM shares also applies from 6 April 2026.

Our article with tips to reduce inheritance tax might be of interest to you.

Pensions

No changes were announced to the pension tax relief system, annual or lifetime allowances. They remain at:

The standard Annual Allowance: £60,000
The standard tax-free lump sum allowance: 25% up to a maximum of £268,275.

The State Pension Triple Lock will be maintained for the duration of the current parliament. The basic and new State Pension will increase by 4.1% from April 2025, in line with earnings growth. Therefore, a full new State Pension will be £203.85 per week (£11,975 per year) from 6 April 2025.

As above, from April 2027, Inheritance Tax (IHT) on pensions is introduced, meaning pensions will form part of the deceased’s estate.

The Pension Credit Standard Minimum Guarantee will also rise by 4.1% from April 2025.

Business Taxes

Headline rates of Corporation Tax will be capped at 25% for the duration of this Parliament.

The government will increase the rate of employer National Insurance contributions (NICs) from 13.8% to 15%, starting in 6 April 2025.

The secondary threshold at which employers must pay NICs will be reduced to £5,000 from £9,100 a year from 6 April 2025 until 6 April 2028. Thereafter it will be uprated with the Consumer Price Index (CPI).

Additionally, the Employment Allowance will increase to £10,500, and the £100,000 eligibility threshold for the allowance will be removed, expanding eligibility to all employers with NICs bills.

Savings & Investments

Subscription limits for Adult ISAs, Junior ISAs, and Child Trust Funds will remain at current levels from 6 April 2025 to 5 April 2030. As a reminder they are:

Adult ISAs: £20,000
Junior ISAs: £9,000
Child Trust Funds: £9,000.

The Starting Rate for Savings will be retained at £5,000 for 2025-26.

Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) schemes have been extended to 2035.

Income Tax Thresholds

The government will freeze the basic, higher, and additional rates of income tax until April 2028. From 6 April 2028, the thresholds are expected to rise by inflation. The current thresholds are:

Basic Rate: £12,570
Higher Rate: £50,270
Additional Rate: £150,000.

The frozen thresholds mean more people will be pulled into higher and additional rate tax brackets. This increases the importance of proactive tax planning, particularly with the use of pensions now the tax relief system remains unchanged.

Stamp Duty Land Tax (SDLT)

The current Stamp Duty Land Tax (SDLT) relief threshold of £425,000 for first-time buyers has not been maintained. Therefore, first-time buyers purchasing a property will now pay SDLT of 5% on properties priced above £300,000 and below £500,000.

For first-time buyers purchasing a property priced above £500,000, the standard SDLT rates for 2025 will apply.

The SDLT surcharge for second and additional properties has increased from 3% to 5%, effective from 31st October 2024.

Primary residences will continue to be exempt from CGT.

VAT on Private Education

The standard VAT rate of 20% will apply to education and boarding services provided by private schools starting from 1 January 2025.

What happens next?

There are typically two main phases in any Budget process before it becomes law. First, Parliament conducts a series of votes and debates on the proposed changes. After this, the Budget must be formalised through a finance bill, which ratifies the changes to the tax regime.

While a government could theoretically be defeated on a specific Budget proposal, this is highly unlikely given Labour’s considerable majority. Some of the new rules will likely take effect at the beginning of the next tax year, while others may be enacted immediately.

Summary

The Autumn Budget 2024 brings significant changes across various financial planning areas, impacting capital gains tax, business taxes, inheritance tax, savings, income tax thresholds, stamp duty and pensions. It’s essential for clients to understand these changes and their implications to make informed financial planning decisions.

To navigate these changes effectively, we encourage clients to review their financial plans and consult with our independent financial adviser team in Cirencester for tailored advice.

Staying proactive can help ensure that your financial strategies align with the evolving landscape.

Contact us today to schedule a consultation

Investment risk information

Please note, the value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

This information is for general information only and does not constitute advice. The information is aimed at retail clients only.

Past performance is not necessarily a guide to future performance.

Frequently asked questions

What are the key changes in the Autumn Budget 2024?

The Autumn Budget introduced adjustments to personal tax thresholds, business taxes, pensions, business property and agricultural property reliefs to name a few. The article above explains in more detail.

Have pension rules changed in this budget?

Slightly. The main pension changes centred around bringing pensions back into the estate on death and possibly liable to Inheritance Tax. These changes could affect your retirement planning strategy, particularly for higher earners or those close to retirement.

Are there any changes to inheritance tax?

Inheritance tax thresholds remain frozen, which could pull more estates into liability due to rising asset values. Planning early can help reduce the potential tax burden on your estate. Some caps on certain reliefs were also announced. More on that above.

What’s happening with capital gains tax?

From 30 October 2024, the main Capital Gains Tax (CGT) rates will rise:

– Basic rate taxpayers: from 10% to 18%

– Higher rate taxpayers: from 20% to 24%.

From 6 April 2025, gains qualifying for Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) will be taxed at 14% (up from 10%), increasing to 18% from April 2026.

If you’re planning to sell assets, reviewing your tax position now could help minimise your CGT liability.

Do the changes impact my existing investments?

Potentially. Adjustments to tax allowances and incentives might influence how your gains are taxed. We can help review your investments considering these changes.

What should I do to ensure I’m making the most of these updates?

Staying proactive is key. Regular reviews of your financial plan can ensure you’re taking advantage of opportunities while avoiding unnecessary tax costs. Get in touch with us in Cirencester to discuss your tailored strategy.

Download your pension guide for high earners and company directors

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Abode Financial Advisers is an Independent Financial Advisor in Cirencester.

Abode Financial Advisers is a financial adviser based in Cirencester, Gloucestershire. Abode Financial Planning is an independent financial advice firm offering comprehensive financial planning services, including: independent financial advice, retirement planning, pension advice, investment advice, wealth management, and inheritance tax planning.

If you wish to discuss your situation, contact us for a no-obligation initial call, held at our expense. Call us on 01285 703 060.

Abode Financial Advisers is located at Watermoor Point, Watermoor Road, Cirencester, Gloucestershire, GL7 1LF.